Private Bond Restructurings: Lessons for the Case of Sovereign Debtors

IMF Working Papers, February 1, 1996

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This paper reviews recent experience with both sovereign and private bond restructurings.
It summarizes the literature on private bond restructurings.
It describes the “typical” process for a voluntary exchange of new bonds for existing obligations.
From this information some conclusions are drawn as to the possibility of concluding voluntary restructuring agreements for sovereign bonds within relatively short periods of time.

Review of recent experience
- Comparative examination of sovereign bond restructurings and private bond restructurings.
Literature synthesis
- Summarizes extant literature on private bond restructurings and related concepts.
Typical voluntary exchange process
- Describes the procedural steps involved in a voluntary exchange of new bonds for existing obligations.
Conclusions on feasibility and timing
- Draws conclusions regarding the possibility of concluding voluntary restructuring agreements for sovereign bonds within relatively short periods of time.